Home Business Laws: An Ideal Home Business Laws Guide

OK. You have a wonderful home business idea. You know it's something you'll really enjoy. You've done some market testing and believe you can make some money with it. Now what?

One of the toughest parts of starting a home business is dealing with all the legal and tax issues. This may seem complicated and scary. But don't let it be an excuse for delay. Just educate yourself.

A: This varies by city. You need to call your local county or city clerk's office--which is usually located at City Hall--to find out what your business licensing requirements will be.

To make things run smoothly, explain what type of business you plan to start so they can tell you exactly what you will need to get started. Familiarize yourself with these permits (Their costs will vary depending on where you live):

Seller's or Resale Permit--If your state has a sales tax, and you plan to sell goods in-state, you will need this permit. It allows you to avoid paying sales tax on supplies when you buy from wholesalers.
Food Permit--If you plan to make or sell food, you'll need this one. Expect to receive a visit from your local health department.
Zoning permit--Don't mess around with this one. Visit your local planning department or city zoning board to see if your area is zoned for a home business. Because laws are so outdated, you may be told you cannot start a business from home. Don't let this scare you. If you can prove your home business won't create a lot of traffic, odor, noise or anything else that might bother neighbors, try to get your laws changed or a legal variance. You can choose to avoid checking, but I don't want to see you start a successful home business only to be shut down after the fact.
State occupational licenses--Day-care operators especially need to check this out. Your state affairs office should be able to help.

A: If you have employees, are in a partnership or are incorporated, you will need a federal Employer's Identification Number. If you are a sole proprietor and have no employees, you can use your Social Security number as your tax ID number. You can obtain an EIN through the Internal Revenue Service.

A: Yes! Make sure you don't give your business a vague name. You want your customers to remember your name and you want future customers--if they see your name on the street--to know what it is you do.

Make sure someone else doesn't have whatever name you come up with. First check your phone books. If you don't see anything, go to your county clerk's office. They will have on file all the business names in your area.

There are two ways to name your business. Say you have a typing service. You could call yourself, "We Type, So you Don't" or "Deb Ruggiero's Typing Service."

The first name will require a DBA (doing business as) registration. You can do this at the county clerk's office. Some clerks, for a charge, place your DBA in the local paper for you. If they don't, you need to run it once a week for four weeks. If you decide to put your surname into your business name (Deb Ruggiero's Typing), you may not need a DBA. (Some states always require you to file a DBA and most banks won't cash your checks if you haven't registered your business name.) You also need a DBA if your business name includes words such as Company, Associates, Group, Brothers or Sons.

If you want to grow your home business, you'll need national name protection. You will then want to register your name as a trademark. To do this you should contact the U.S. Patent and Trademark Offices in Washington, DC.

A: If you are starting your business via a business opportunity ad or franchise, I highly recommend you discuss it with a lawyer. It's best to spend the money now rather than lose a lot more down the road because you didn't know what you were getting into.

You will also need to consult a lawyer if you will be dealing with a significant amount of money, are incorporating or are in a partnership.

A: If you're starting a home-based business, there's a good chance you can save some money and do your own accounting. Some wonderful accounting programs let you do it on your computer. You can also keep track of your expenses and income on paper. If you stay very organized, you'll be OK.

If you absolutely *hate* paperwork or turn green at the mere thought of accounting, consider seeking out someone who enjoys it.

A: Most homeowners insurance will not cover a home business. Talk with your insurance rep. Your needs will vary depending on the nature of your business and whether you will have clients in your home.

Three organizations offer free information on starting your business. You can find them online and at local branches in your town. They know what is needed and what isn't so far as licenses and permits go where you live. They are there for you. Use them.

Liz Folger, Work-At-Home Mom Expert
Author - The Stay-at-Home Mom's Guide To Making Money
Bizy Moms http://www.bizymoms.com